Taxation of Sole Proprietorship

Cite this article as:"Taxation of Sole Proprietorship," in The Business Professor, updated October 10, 2014, last accessed October 20, 2020, https://thebusinessprofessor.com/lesson/taxation-sole-proprietorship/.
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Sole Proprietorship Taxation

http://youtu.be/zqzhl9HSK0I Back To: BUSINESS ENTITIES, CORPORATE GOVERNANCE, & OWNERSHIP Sole Proprietorship Tax Overview A sole proprietorship is not a separate tax entity.  Sole proprietorship income is treated as personal income of the owner. That is, the profits or losses of the sole propri

Cite this article as:"Taxation of Sole Proprietorship," in The Business Professor, updated October 10, 2014, last accessed October 20, 2020, https://thebusinessprofessor.com/lesson/taxation-sole-proprietorship/.

Back To: BUSINESS ENTITIES, CORPORATE GOVERNANCE, & OWNERSHIP

Sole Proprietorship Tax Overview

A sole proprietorship is not a separate tax entity.  Sole proprietorship income is treated as personal income of the owner. That is, the profits or losses of the sole proprietorship pass through to the personal income taxes of the owner.  The sole proprietor is responsible for paying in a timely manner any taxes associated with income.  The owner must make estimated income tax payments periodically throughout the year. Further, the sole proprietor must pay self-employment taxes. These are combination of social security and medicare taxes.

See our accounting resources for more information on business entity taxation.

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